By Rae Wee and Brigid Riley
SINGAPORE (Reuters) – Bitcoin plunged to its lowest level since November and was poised for its largest weekly decline in over two years, caught up in a tech stock sell-off amid concerns about U.S. crypto policy and a $1.5 billion hack that have left industry sentiment fragile.
The leading cryptocurrency by market value plummeted by as much as 7% on Friday to $78,273, marking its lowest point since November 10 and heading towards a fifth consecutive day of losses. It has tumbled by 16% over the past week, marking its most significant weekly drop since the collapse of the FTX crypto exchange in November 2022. The broader crypto market has shed nearly half a trillion dollars in just the past week, as per Coingecko.
“Inflationary pressures, diminishing growth prospects, and uncertainty regarding Trump’s tariffs persist. With Trump’s focus elsewhere and no action on deregulating crypto, bitcoin traders are feeling unsettled,” commented Matt Simpson, senior market analyst at City Index.
Bitcoin typically moves in tandem with assets like tech stocks that benefit from positive economic outlooks. The tech-heavy Nasdaq hit its lowest point since November. Investors are concerned that the perceived exceptionalism of the U.S. economy is waning, and they are wary of President Trump’s tariff actions, which have raised worries of higher global inflation and slower growth.
For the top cryptocurrency, the landscape now looks starkly different from mid-January, when optimism around the Trump administration supporting a strategic bitcoin fund and easing regulations pushed its value close to $110,000. However, there has been limited concrete progress on these fronts for investors, beyond the initial flurry of appointments of crypto-friendly officials when Trump assumed office.
The decline in bitcoin’s value suggests that the positive sentiments linked to a crypto-friendly administration and high-profile endorsements have waned, noted Joshua Chu, Co-Chair of the Hong Kong Web3 Association. He stated, “It’s becoming evident that bitcoin is more of a risk asset rather than the inflation hedge or digital gold it has been touted as.”
Ether, the second-largest cryptocurrency by market value, was down 6% at $2,149.38, hovering near its lowest level since January 2024. Additionally, “TRUMP,” a memecoin launched by Trump during his inauguration, has lost 50% of its value, while his wife’s “MELANIA” token has seen a 90% decline.
Investors have also been withdrawing funds from bitcoin exchange-traded funds, with U.S.-listed bitcoin ETFs witnessing outflows of $2.27 billion this week.
In a note on Friday, Bank of America analysts pointed out that bitcoin’s struggle to surpass $97,000 on a daily basis since November was an initial signal of a potential market correction. The recent excitement
The fall in prices had a negative impact on stocks connected to cryptocurrencies in the U.S. premarket trading. Crypto exchange Coinbase Global and the bitcoin buyer Strategy saw a decrease of 2.3%, while mining companies Riot Blockchain Inc and Marathon Patent Group Holdings dropped by about 3.5%. Reported by Rae Wee and Brigid Riley, with additional contributions by Medha Singh. The article was written by Alden Bentley, Vidya Ranganathan, and Alun John, and edited by Sam Holmes, Amanda Cooper, and Christina Fincher.
